Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
As the tensions between Russia and Ukraine continue to rise, President Biden said this week that he intends to designate Qatar as a “major non-NATO ally,” during a meeting with the country’s head of state, Sheikh Tamim Bin Hamad Al-Thani, at the White House.
Bahrain and Kuwait are the two other Gulf States that currently have this status.
While this decision appears to have been in the works for quite a while, the move has certainly been sped up due to the current situation. The announcement comes as the Administration meets with representatives of Qatar to discuss a European energy contingency plan should supplies from Russia be interrupted. Right now, Qatar is the second biggest provider of liquefied natural gas (LNG) in the world.
Russia is currently the largest supplier of natural gas shipped by pipeline to Europe, sending about 40% of the continent’s supplies. The next-largest suppliers via pipeline are Norway (22%), Algeria (18%), Azerbaijan (9%) and Qatar (5%). Europe also receives LNG that is delivered by ships from the United States and Australia, among others. Clearly, should a conflict disturb the flow of Russian gas to the continent, significant actions will have to be taken to ensure that adequate supplies are available for heating, power production and industry.
The move comes on the heels of action last week on the domestic front, where the Biden Administration approached oil and natural gas producers in the United States to determine how supplies could be ramped up in order to supply energy to Europe in case of disruptions. It appears likely that the crisis, however it ends up, has served as a reminder to many policymakers in the U.S. and world that ensuring adequate domestic stable sources of energy are imperative.
Energy Sector Has a Strong January
Back home, the energy sector outperformed the 10 other sectors of the S&P 500 by a spectacular margin in January. The sector posted an 18.97% return and was the only sector to finish in positive territory in the month, and it did so by a wide margin. While supply chain and financing concerns continue, the overall outlook for the sector continues to look better each month. The gains are starting to be felt in the oil patch too, with U.S. energy firms adding oil and natural gas rigs for a record 18th month in a row as oil prices soared this week to their highest since 2014.
If you would like to get involved with the Council’s advocacy efforts or the Government Affairs Committee, contact SVP Government Affairs Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.